WATER UPDATE

Water Quality

•  Water quality during April met or exceeded State and Federal drinking water standards.

•  The Valley Pumping Plant blend ratio for the month of April was 46% MWD to 54% BOU.

Financial and Operations Update

•  Potable water sales for April were 667,455 units. This was 2% higher than the budgeted sales. Revenue for April was $1,089,815.

•  Reclaimed water sales for April were 2,303 billing units. Revenue for April was  $2,894, not including the Power Plant sales.

• Fiscal Year 2002-03 Year-To-Date preliminary Water Fund Financial Results as of April 30, 2003.

•      The Water Cost Adjustment Charge (WCAC) account had a balance of $1,251,000 as of April 30, 2003.

Environmental Protection Agency (EPA)

• BWP received a grant from the EPA to perform a Vulnerability Assessment. The Report has been filed with the EPA and the Emergency Operation Plan is being updated.

• The design work for the modifications to the Liquid Phase Granulated Activated Carbon  (LPGAC) units has been completed.  The EPA provided approval to fabricate the necessary materials. Approval for construction is pending EPA�s approval of the final design. 

Capital Projects

• Replacement of interior joints at Reservoir No. 2 continues. A Contract Amendment was approved on April 22 and the completion is scheduled in May 2003.

• The Water Division continues to support the Magnolia Power Project by abandoning and relocating the water facilities on BWP�s proposed construction site. The 12 inch and 6 inch domestic mains on this site were relocated and returned to service.

• Work began on the 12 inch main on San Fernando Road into Glendale, down to Graham Place and back into Burbank, with completion in May 2003.

• The painting contractor is working in the Brace and Haven tanks, recoating one tank at each site. Tanks should be returned to service in May 2003.

Legislative Update/Other Reports

• Refer to the attached reports from the Los Angeles Daily News, Los Angeles Times,  Metropolitan Water District of Southern California, and California Municipal Utilities Association (CMUA).

• MWD is sponsoring a two and one-half day educational trip of the Northern California State Water Project/Bay-Delta on June 13, 14, and 15, 2003. The trip will allow participants to view, first-hand, MWD's statewide investments in an effort to ensure reliable supplies of water for Southern California.

ELECTRIC UPDATE

Electric Reliability

• During the first ten months of FY 2002-03, there were 22 outages that affected 8,796 customers, which equals a systemwide average of 0.1626 outages per year compared with an industry average of 1.2 outages per year. The average service availability is 99.996%, exceeding the City goal of 99.990%. Two of the outages, with the cause still under investigation, lasted more than 3 hours each and involved failure of 12 kV pad mount switches.  The average outage length was 91 minutes, compared with an industry average of 80 minutes. 

The following table shows the systemwide reliability statistics for FY 2001-02 compared to the first ten months of FY 2002-03.

Financial and Operations Update

�        Fiscal Year 2002-03 year-to-date preliminary Power Financial Results as of April 30, 2003.

^(a) Includes in-lieu

^(b) Transmission and Telecom sales

• MWh sales of 75,482 for April were below the budgeted amount of 89,985. Temperatures were warmer than average with heating degree days of 228 versus a 30 year average of 115.  Year-to-date MWh sales remain below budget due to conservation efforts and a cooler than normal temperature at this time of year.

• Wholesale gross margins were above budget for the month of April. Year-to-date wholesale gross margins continue to be higher due to BWP�s ability to efficiently use its assets to increase sales in the wholesale market.

Local Generation Operations Update

Unit Status

�        Magnolia 5 is available for service.

• Olive 1 is unavailable for service until the NOx retrofit is complete by May 30, 2003.

• Olive 2 is unavailable for service until the NOx retrofit is complete by June 14, 2003.

• Olive 3 is available for service.

• Olive 4 is available for service.

• Lake One is available for service.

The Olive Boiler inspections and overhaul of equipment continues. Inspections of the major pumps and fans are on schedule and power plant personnel will continue to support the Olive Retrofit project. All required instrumentation for Olive 1 and 2 were installed and additional pieces (enhancements) will be added when the instrument electrical subcontractor arrives in May. Olive 1 CEMS calibrates daily. The Data Acquisition and Handling Software (DAHS) software installation will be completed in May 2003.

The demolition of Magnolia Units 1 and 2 building continues. Abatement has been completed on Magnolia 3 and 4 boiler ducting.

Lake One was available to support the Toluca Lake Valley Lines 1 and 2 project to minimize import limitation.  The purchase order was issued on April 15 for the Gas Compressor Fire Protection system. In order to minimize build up of contaminants on the turbine blading that can negatively impact efficiency, off line water washing of the gas turbine compressor section was completed on April 23^rd. Instruments for the 10 minute fast start have been installed.

The landfill microturbines have not operated since they were shut down in January 2003 because of gas compressor failures. We are requesting proposals to replace the current gas dryer and compressor system.

April 2003 Unit Data

Power Supply

• Transmission and Regional Transmission Organizations (RTOs)

On April 28, 2003, FERC issued a White Paper on the Wholesale Power Market Platform. The White Paper was initially developed based on the promise of Chairman Wood that the Commission would reconsider aspects of The Standard Market Design (SMD) based on comments of several disgruntled Western Senators who expressed concern with the application of SMD to their individual states. FERC received political pressure from others as well. The paper sets the requirements of FERC�s Final Rule on RTOs which was written in response to the extensive comments FERC has received over the past nine months and Congressional opposition to its proposed SMD for RTOs. FERC�s stated goal is to continue to provide reliable and reasonably priced electric service for all customers, sufficient electric infrastructures, transparent markets with fair rules for all market participants, stability and regulatory certainty for customers, the electric power industry, and investors, technological innovation, and be efficient with the nation�s resources.

In the Final Rule, FERC will remove the �command and control approach� from its earlier proposal and provide considerable regional flexibility. The Final Rule will allow not only phased-in implementation and sequencing tailored to each region but also modifications to benefit customers within each region. The IOU�s are still required to join an RTO but they won�t need to turn its transmission over to an Independent Transmission Company. Divestiture of transmission is no longer required to achieve independent operation of the transmission system. Companies may remain vertically integrated under an RTO or ISO. There is a requirement for RTOs and ISOs to develop a periodic regional transmission plan for submission to relevant state and local siting authorities and to assist the states in whatever manner they desire, including evaluating the impact of new generation, transmission, energy efficiency, and demand response on regional reliability and resource adequacy. The final rule will eliminate any requirement that Firm Transmission Rights (�FTRs�) be auctioned. FTRs will be allocated according to existing contracts and existing service agreements in order to protect customers. Further, each RTO or ISO will be required to have a clear transmission cost recovery policy outlined in its tariff. Each RTO must still be independent. Spot markets must be set up to meet customers� real-time needs and regions in order to develop an approach to manage congestion that protects against manipulation while promoting use of the lowest cost generation.

FERC Data Requests and Refund Calculation

On April 30, 2003, Burbank�s Washington FERC attorneys submitted comments to FERC advocating certain changes to the FERC March 27, 2003 Refund Decision. The eighty page document provides details on identifying problems associated with the Refund Decision. In general, BWP was concerned that FERC would inappropriately draw conclusions not supported by submitted evidence. In addition, there are a few specific items that BWP is concerned with, such as:

• Gas prices used to calculate market clearing prices

• Treatment of  other parties who didn�t manipulate gas prices

• Inconsistencies in how power and gas costs are treated

•  The Commission�s assertion of jurisdiction over municipal utilities

•  Findings regarding Department of Energy ordered sales

• Disallowance of BWP�s NOx costs, which were incurred when BWP sold power to the ISO

Accordingly, BWP believes that FERC needs to modify their decision and base it only on the facts, not policy or political consideration. If FERC adopts BWP proposals, BWP can expect to receive the $6 million owed to us by the ISO.

• Restructuring of the Gas Industry in Southern California

Implementation of the Comprehensive Settlement by Southern California Gas Company (SoCalGas) is still under suspension until October 2003. SoCalGas is currently working on the details of the implementation.

• Sylmar Converter Station Replacement Project

LADWP held a meeting on April 23^rd to update progress on the Project. The engineering and fabrication work associated with this project continues with a scheduled completion date of late 2004. Staff continues to work with FEMA to secure funding for about one-half of Burbank�s portion of the project.

• Magnolia Power Project (MPP)

The items in this report are provided as a general overview of the status of this project. These items are discussed in considerable detail among the Project Participants at the Project Coordination meeting each Friday and at Coordinating Committee meetings.

Budget

Forecasted final costs are within budget. Refer to the Project Budget on planned and actual expenditures.

Schedule

The project remains on schedule for a commercial operation date of May 25, 2005. Refer to Project Schedule for detailed information on Project milestones.

Project Agreements

Executed copies of the agreements on compact disc have been distributed to Project Participants. 

Finance

PricewaterhouseCoopers has completed the final audit of Planning Work and Pre-Construction Costs. 

CEC Compliance

The Conditions of Certification include fifty conditions that must be completed before the start of construction. Most submittals require review and approval by the CEC Compliance Manager before they are considered complete.  Of the fifty required submittals, thirty-six have been submitted and nine have been approved. 

Engineering, Procurement and Construction

The following major activities were completed since the last Project Director�s Report of

April 14:

�        April 21:  Project Plot Plan Issued for comment

�        April 28:  Zero Liquid Discharge Bid Package Issued

�        April 28:  Kvaerner issued Full Notice to Proceed (FNTP)

�        April 30:  Cooling Tower Bid Package Issued

�        May 2:     Control/Services Building Contract Awarded

�        May 7:     Condenser Bid Package Issued

Transmission

Numerous options for the transmission of Project output to the ISO have been studied and estimated for construction. The options that remain under consideration and being further developed include:

1. Operational arrangements with LADWP that would provide opportunities to deliver Project output to the ISO under an integrated facilities agreement. LADWP is expected to offer a detailed proposal to the Magnolia participants in late May.

2. Use of Southern California Edison�s (SCEs) existing 66 kV system to deliver Project output to the ISO at Eagle Rock by connecting the Burbank system to SCE�s MacNeil Substation. On April 24, a letter was sent to SCE, informing them that Burbank will execute an agreement to authorize and fund studies on this option.

3. Use of SCE�s existing right-of-way from MacNeil to Sylmar to deliver Project output to the ISO at Sylmar by overbuilding with either 230 kV or 69 kV lines. The letter sent to SCE on April 24 also indicated Burbank�s interest in this option.

4. Displacement of Magnolia output with eastern generation resources of Burbank and Glendale. Initial review of this option holds promise as a system sale at an ISO interconnection point such as Marketplace. 

Public Information

The Project�s Community Response telephone number has been activated. The mailing list of approximately 400 invitations has been finalized for the Groundbreaking Ceremony. 

Project Manager�s (Project Director�s) Actions Since Last Coordinating Committee Meeting

With consultation and agreement from Project Participants, the following actions have been taken since the last Project Director�s Report of April 14:

• Authorization of $336,471 for three change orders to General Electric for the gas and steam turbines to ensure overall plant reliability and safety.

• Authorization of $30,000 for a change order to Cleveland Wrecking Company for work related to demolition of Magnolia 3 and the 78-Tank area.

• Authorization of $85,000 per year for a change order to Kvaerner for services of a document control clerk for Owner-furnished submittals to the Chief Building Officer.

• Authorization of $60,000 to Navigant for transmission studies related to interconnection with LADWP and interconnection between Glendale and Burbank

• Authorization of $12,500 to relocate offices of the International Brotherhood of Electrical Workers

• Authorization of $117,535  for a change order to General Electric for blowdown cover, training class and auxiliary skid consolidation

Key Milestones and Significant Activities For the Next 30 Days

• May 14:  Invitations mailed for Groundbreaking Ceremony

• May 19:  Reimbursement of Planning Work and Pre-Construction Costs to Participants

• May 23:  Site Mobilization

• May 26:  Award Circulating Water Pump Contract

• May 30:  Complete CEC pre-construction submittal requirements

• June 7:    Award Cooling Tower Contract

• June 9:    Award Condenser and Startup Deaerator Contract

• June 10:  Groundbreaking Ceremony

Coordinating Committee Meeting

Staff visited US Filter (ZLD) Zero Liquid Discharge Projects at the Redhawk Generating Station and the Harquahala Generating Stations in Maricopa County, Arizona. This was done to familiarize them with the technology that is proposed for this project.

Power Plant managers met with US Filter and Aquatech representatives on MPP water projects. A meeting was also held with GE Controls, SCPPA and Kvaerner on the proposed integrated plant control system.

Capital Projects

• SCADA/EM

During April, remote terminal units (RTU) were modified, installed, and tested at Town and Flower Distributing Stations and at the NBC Customer Station. Drawings were issued for the RTU at Clybourn Distributing Station. The communication link between SCADA and the Distributed Control System (DCS) at the Olive Power Plant and Lake One were successfully established. The DCS and the Telvent Automatic Generation Control (AGC) software were successfully interfaced. An RFP with EDG Power to interface the Mark VI GE software for Lake 1 and the DCS for AGC was received. Work to establish AGC for Lake 1 is scheduled for early June. Work continued on the SCADA system database and several applications.

• Telecom

BWP Field personnel completed the remaining substructure work and began the fiber optic cable installation along Alameda Avenue from Victory Boulevard to Keystone Street. This project will provide a redundant path of fiber for Disney.

BWP Engineering personnel met with representatives from OnFiber and Level3 to discuss a project that involves a customer in Pasadena who is currently connected on the Level3 fiber and is seeking connectivity to both Warner Brothers and Qwest on the Burbank fiber loop. BWP Engineering is in the process of developing a proposal.

• BWP Administration Building Remodel

Phase III of the Administration Building Remodel Project is on hold pending further review of the final set of construction drawings and specifications by a new architect.

RTKL Associates Inc. developed several conceptual plans for the entire 23-acre BWP site to create a new look or theme for the site. The proposals include several aspects: a painting scheme, landscape elements, lighting concepts, and opportunities for public art and structural modifications. RTKL will create a unified conceptual approach to enhance the image of the Burbank Water and Power site. 

• Electrical Distribution

The duct and manhole work to reroute the 34.5 kV Burbank-San Jose line around the MPP Project is 75% complete.

The job to re-insulate the 69,000-volt Toluca-Valley No. 1 line, and to replace poles as necessary, is 80% complete.

Construction work is 40% complete for extending the ducts and manholes along Hollywood Way from the Warner Ranch Gate to Oak Street, along Oak Street to California Street, along California Street from Oak Street to Alameda Avenue, and also along Avon Street from Oak Street to the alley north of Alameda.

Staff expects construction of the new off-ramp, which will allow construction of a new Hollywood Way Distributing Station, to be completed by June 30, 2003. BWP staff continues to expect the new Hollywood Way Station to be completed by April 2004. The existing off-ramp will be closed to traffic from May 19 until the new off-ramp is open.

Underground ductwork has been completed near Hollywood Way and San Fernando, allowing an overhead line to be rerouted along a less visible path.

Substructure work for Phase I of the DCSB has been completed, including primary underground service to the old Wells Fargo building.

Since July 1, 2002, 110 poles have been replaced. The line crews are rebuilding pole lines in the Rancho area, and converting the remaining portion of Feeder N-15 to 12,470 volts.

Since July 1, 2002, nine overhead oil switches have been installed.

Victory-Valley No. 2, the third 34,500-volt line position at Victory Distributing Station is completed.

Oil switches at San Jose Distributing Station have been replaced with SF6 switches.

Electric service to Howard Business Park (Ontario Street) from the 34,500-volt system has been completed.

Service to Radio Shack has been rerouted and energized to clear the old Police site.

In addition to the identified major projects, 25 padmounted customer stations have been engineered, and 15 have been issued to the field since July 1, including the Phase II Burbank High and John Burroughs High School expansions.

Six street light improvement and undergrounding projects have been issued to the field. This includes a project to convert a series circuit at the intersection of Olive and Alameda.

Engineering has been completed for the final phase of the Ben Mar Hills Project and for the Magnolia Boulevard Project. The firm of Perry C. Thomas Construction will begin this work in May.

Work is underway to replace 1,200 residential electric meters with meters that can be read remotely; 905 1,003 meters have been installed through April 30.

• Energy Risk Management

BWP�s Energy Risk Management Policy was presented to the City Council on May 13, 2003.

Legislative Update

See Attachment 

RED:RAC:FCF:JWL:GLS:ph

H:MAY W&E OPERATIONS REPORT

Attachments

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